Listen to Robert Emmerich introduce "The Big Apple," a hit song from 1937. Music written by Bob and performed by Tommy Dorsey's Clambake Seven with Bob on piano. Lyrics written by Buddy Bernier and sung by Edythe Wright. Audio provided by Dorothy Emmerich.

"The scandal isn’t what’s illegal, the scandal is what’s legal” has long been associated with American political journalist Michael Kinsley. “The scandal isn’t what’s illegal, the scandal is what’s legal” was written by Kinsley in June 1986, in a story about Wall Street insider trading. ”New Republic editor Michael Kinsley calls it ‘Kinsley’s Law.’ He says the scandal in Washington is not what’s illegal, it’s what’s legal” was cited in July 1988.

However, “Often the real scandal isn’t what’s illegal, but what’s legal” was cited in the Baltimore (MD) Sun in November 1984. The saying is usually applied to the money in Washington politics, but it’s been used in local politics as well. “Esposito proved once again that the real scandal in New York politics was what’s legal, not what was illegal” was cited in the book City for Sale: Ed Koch and the Betrayal of New York (1988).

Wikipedia: Michael KinsleyMichael Kinsley (born March 9, 1951) is an American political journalist, commentator, television host, and pundit. Primarily active in print media as both a writer and editor, he also became known to television audiences as a co-host on Crossfire. Kinsley has been a notable participant in the mainstream media’s development of online content.
(...)
Quotes
“I have a saying: the scandal isn’t what’s illegal, the scandal is what’s legal.” — from Crossfire, CNN, Nov. 15, 1990.

Google BooksCity for Sale:
Ed Koch and the Betrayal of New York
By Jack Newfield and Wayne Barrett
New York, NY: Harper & Row
1988
Pg. 319:
Esposito proved once again that the real scandal in New York politics was what’s legal, not what was illegal.

Google BooksThe New Official Rules:
Maxims for muddling through to the twenty-first century
By Paul Dickson
Reading, MA: Addison-Wesley Pub. Co.
1989
Pg. 210:
When wrongdoing is exposed, the real scandal is what’s legal. — Timothy Noah, The New Republic, July 11, 1988.

The real scandal in Congress is not what’s illegal; it is what’s legal: the blatant, shameless greasing of congressional palms that violates good sense, good taste and good government.

Time magazine
THE CONSPIRACY OF TRIVIA
By Michael Kinsley Monday, Mar. 17, 1997
It’s often said, in trying to sort out the rights and wrongs of some public controversy, that the scandal isn’t the illegal behavior--the scandal is what’s legal. The press understandably tends to concentrate on whether laws were broken. This is a bright line that relieves journalists of the need to make (or, worse, be seen making) moral judgments. But in this world of sinners, the fact that some people choose to cross the line is less interesting and important than the question of where society chooses to draw the line.